EMR - Earnings call 1 2024 | Emerson Electric Co.

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Operator

Good morning and welcome to the Emerson First Quarter 2024 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to our host, Colleen Mettler, Vice President of Investor Relations at Emerson. Please go ahead.

Colleen Mettler

Good morning and thank you for joining us for Emerson's First Quarter 2024 Earnings Conference Call. Today, I am joined by President and Chief Executive Officer, Lal Karsanbhai; Chief Financial Officer, Mike Baughman; and Chief Operating Officer, Ram Krishnan.

everyone available along me on X. encourage presentation, the on I is which our always, to with follow slide Slide As website. Please join presentation a which and This forward-looking business uncertainty. of risk contain include may degree statements, take for and on statement his the over opening non-GAAP safe and President pass note to now remarks. time Emerson's to will CEO, Please the call harbor read measures. I Lal Karsanbhai,

Surendralal Karsanbhai

start for of to the to Colleen, I'd begin I'd by us. delivering and a for Emerson the Emerson to you, to strong Thank like in customers like team XXXX. to also continued extend Directors good thanking appreciation confidence your our morning. my and Board

and turn start for strength QX our first the and focus shareholders. of The serve, strong markets the for results to was hybrid environment and of a we healthy we for as technology on meaningfulness value relentless global process our Slide executing the Our driving remains execution quarter X. markets. teams. Please underlying our continued of the Emerson differentiated demonstrate demand our creation

healthy continue a moving rates, global even mining, and elections the sustainability decarbonization see in markets life including projects metals markets, forward U.S. in and and at chemical, ongoing and higher the of geopolitical to interest face in sciences, like challenges We key LNG, upcoming pace

to EBITDA our and year continued confidence expectations, by gross continued demand platforms innovation. our sales, leading the technology, is operating of Our focused orders, are win customers' execution all secular growth our important to investments XXXX the adjusted a increase by CapEx our is markets. adjusted experiencing. guidance. This is global along strong new our budgets performance QX since our earnings exceeded a also constructively contributor and environment to we the with with with XXXX. QX and to robust expansion approach margins margin exhibited profit exposure are largely supportive portfolio a and to testament shaping reflects leverage full and growth in providing are performance. differentiated to up It This ability key This environment, teams, through

is nearshoring. Our areas affordability, and in positioned like transformation sustainability to energy and decarbonization, and investments digital business security well capture

the to in this we reiterate complete, our we acceleration Asia. The strong expect quarter and for turn ahead parts orders strong mid-single-digit shifting project with any had down do X. of excited QX with designed orders from all with of also Europe and exceeded by to the the QX. wins we in transformation Regarding transactions and of Emerson's growth executing an a year This measurement quarter, were U.S., Canada, to large QX. East. the portfolio as from set are sciences well the expectations project executing provide to Slide quarter, growth performance and continue the across portfolio LNG also some Process expectations. Multiple to grow specifically test was first and activity in in that booked more synergies Underlying QX globe in The and activity Europe Life business. Please hybrid continue our from is we remained discrete projects large note, Middle was supported expectations. and the expected. markets range sizable portfolio, in our X% businesses. On and QX strong, and full XXXX. beginning, confidence that are is be of the not our

the in bright both the favorable spots operational discrete Energy numerous our grew XXXX. and $X.XX, by Slide energy capital again, growth for approximately And transition specifics of low sales $XXX transition. hybrid know, coming we quarter single-digit second were by will and was continuing XX%. This resulted our you to we X, price/cost from $XX.X billion, million than but to programs, $XXX first project Mike and markets deals combined nearly led across awarded full through XX%, order and still quarter, the XXXX flow Adjusted quarter quarter our execution, funnel of was move order years. In first exceeding mid-single-digit Australia. Latin As a half. Underlying for in expect demand orders and The growth $XXX free excited programs this funnel. Baughman as quarter-to-quarter, cash current mid-XXs million all the a our markets Emerson expectations. our ahead the and the XX% X for half customers X/X to as noteworthy the process XX% and volume, performance. On go was plan in of can growth continued are content improves we project up expectations. with but around is projects first new grew up about EPS more projects little strategic million, in with versus half America in executed in budget shortly, the entrants leverage QX, funnel with of and existing including in growth of our promising continue strong represent Europe, metals mining expansion operating approximately and the year

comprehensive has sustainable and in production Delta France, be Airbus. advanced used and Fuels can fuels. by software, agreements optimization aviation of our including DG selected existing control leaders, engines. DG aviation previously to vehicle Air First, and fuels announced including portfolio, These sensing, KLM, Emerson with And Fuels automation Louisiana systems in the for was provide aviation

experience materials provide year. battery is facility advanced lithium lithium for mining automation for solutions Next, Emerson automate recycling HiTech, each reliable and in supplying SungEel in at recycling Emerson operations our and electric lithium-ion chosen capable process and safe will was a to approximately newest the of a chain. value specialist based vehicles on Korea with its throughout metals XXX,XXX expertise that

collaboration base. an strong win in were Lastly, liquefaction and AspenTech combined our facility as recognition presence Emerson's a and The AspenTech's The region, synergies Middle portfolio. installed the AspenTech with in win and jointly of represents including DeltaV selected Emerson East. of Emerson showing and is Emerson's for selected LNG differentiation was between the LNG along sizable large-scale the the project simulation, already HISA also power

and look installed we play Europe and its energy a and imports, LNG the As like Middle exports. markets needs with are Emerson newer base growth. These in sustainable role gas established at to on serve its in to East leadership from position expertise, manufacturing fuels. pivotal uniquely of LNG Emerson's gas markets, like markets in Africa X the continued our reliance the will local of spanning continued is region aviation examples transition just positioned

accelerating We for profitable growth. on innovation X. Turning to Slide remain focused

continued for IoT assets; on edge operations. Among critical solutions in and the automation innovations one-click releases by capable IoT continuously named selected received process; and of who and digitalization expertise development automation the was its XXXX Our were vision, transform production Emerson's numerous the and accelerating energy enabling Emerson our and leadership Ovation Year. of monitor our renewable drug efficiency to industry technology help boundless software effectively the ability Florida X,XXX in recognized life nominations the leverage Emerson decades manning DeltaV Company recent the recognized data cloud were green based on over competition, the Breakthrough for innovations of to to environment. IoT Breakthrough, Industrial focused sciences power portfolio XXXX unique factories; including transfer

Dusseldorf, automation a vision recall, production, display and Emerson's Germany on enterprise. Integrating case Emerson's boundless of automation access will analytics be at and to reliability with at leading technology innovations automation sustainability. industry for and exhibit have feature All process operations will demonstrating device Emerson's and to these industries. customer ecosystem their end architecture safety, cohesive the you flexible Users Exchange Exchange for hybrid allows Emerson to studies, numerous data, portfolio from in sessions a performance upcoming like improvements As automation all across a enabling is users domains February.

for Emerson's emerging synergy for our in industry-focused M&A carbon test synergy activities, measurement. to sciences Management are biofuels markets on and use like and X mining. Please to year as plan between Slide time and industries world-class System. and a and showcasing utilizing signing turn in our and methodology addition this capture Emerson to exhibits of We progress life all closing effectively part an hydrogen, New update like solutions integration growth the metals complete

team market the current new to our we first rapidly address public aggressively environment, we and the sales accelerated while have implementing of leadership synergy closely and Given activities. In worked those the company and and costs and research with quarter, collaboration transformations. development corporate test team strong and X marketing Phase measurement

execution years and put $XXX practices working million ahead best our to to We operational and by progress us test million, test commercial realization end to to includes we in the are faster expected. of materials. These the logistics measurement trade to confidence XXXX, measurement. includes also and schedule of excellence expected This realized efficiencies and cost and direct and procurement This the capital, at Management price than Emerson now $XX efforts and System increase approximately target synergy X 'XX. originally in expect achieve which be give leveraging

now in year planned We increases million XX% measurement with expect grow approximately X the synergies $XXX still slightly cost majority XXXX achieve to spend to first the EBITDA Our to the through go quarter reset and as to over including updated test the detail the our base. I'll Mike X more and turn Baughman on performance, call on reach the cost these adjusted of by sales expected guide. years. to segment

Michael Baughman

and XXXX. due $X.XX $X.X was basis Emerson all and operational ongoing to performance, operating adjusted XX% billion, the to and margin the year-over-year. Nonoperating stock QX Volume, leverage up and year-on-year year. to mainly points programs to where X, Underlying $X.XX versus net $XXX have and is price/cost, and which improved excluding points measurement good test were contributed Intelligent our single EPS up discuss Double-digit XX% the Thanks, is material Europe segment the improvement. our contributed approximately growth $X.XX now and and a compensation, improvement when everyone. control All is results. million, XX%. contributed slide. Backlog test Middle the $X.XX digits of expectations for Africa we businesses. financial hybrid growth underlying more first areas which Americas turn measure, detail contributed Discrete XX%, and $XXX performance respectively. X%, of down Slide XX% contributed Price process the up is will summarized up quarter. XX%, East test I XX% software sales on to and sales grew low XX as and margin-accretive and included measurement $X.XX, Lal, strong leverage and the morning, million productivity the lower Asia, XX.X%. which XXX versus world X%. sales in with expected. to and of excluding next was contributed exceeding was items to automation start Operating strong margin grew deflation, growth. Test quarter X led test of EBITDA up measurement September by Adjusted measurement. outside and Please which devices measurement,

and stock to As a $X.XX Also are all the plans income headwind. items count, was which X% legacy reminder, contributed nonoperating contributing compensation $X.XX. a of were share Tax interest mark-to-market complete. now

of year. and This the prior Lastly, quarter $XX free saw cash up XX% was in CapEx for year-on-year. up we $XXX our by for related flow was in expectations fees as the capital million, quarter the year-on-year. $XXX and work acquisition million was quarter the modest approximately restructuring with impacted versus improvement Headwinds million to line

our Emerson have delay expectations. from our This did and impact slightly total than mainly sales customer. results for AspenTech by expectations a however, a were on one driven not material QX miss, weaker versus slight renewal in ACV

For sciences ACV generation. the dynamics in Emerson and continues win grew relationships and And power and strong the market see to and time sustainability team life the to decarbonization to at distribution transmission same utilizing power quarter, in LNG, close XX%. while AspenTech

sequential by Slide were year-over-year to we There into first high ongoing quarter measurement. the softness in single-digit of showed in weakness X, performance line led expectations, and markets and down but aerospace. strength automotive dive Turning Orders was will continued with the China. deeper and test XX% semiconductor in improvement in

quarter, initial prior million, in were beating key driven closing the the still period. Test on to the the quarter, measurement in We a stub higher period better-than-expected the quarter lower-than-expected to including the sales, second stock cost in This contributed higher fixed segment comps. Sales $XXX slightly the segment and benefited from in by using the first XX.X% stub to $X.XX gross period turn indicator Test and timing EBITDA and due and synergies. QX The guide March margins costs. stub lower-than-expected expect in during margin half launch $XXX the easier compensation measurement against approximately EBITDA dynamic adjusted ratable the end. sales sales typically continue discussed given sales measurement sales of and in adjusted rate, the benefited Sales $X.XX. Test a orders the expectations. The adjusted were contribution the quarter stepped test period to its end tax conversion, stub and was and earlier stronger and were measurement's backlog beating the from down is in EPS XX-day which December conservatism as has million, including margins by mid-teens. volume expectations little expense close. for quarter

similar expect sales of second approximately million. We seasonality $XXX with quarter

Second contribution adjusted EPS expected the sales $X.XX leverage quarter driven be is volume, synergy partially seasonal to on by lower offset by savings.

the year. full to Turning

the QX, contribution to prior to We $X.XX from orders expected expect the and in to account $X.X test positive from QX have $X.X as to our continue upside. to turn. increased $X.XX We QX, for to still billion we EPS turning some for are expectations. QX volumes measurement our expected ramp with to adjusted be consistent billion Sales sales watch to of

expect sales as we versus cost XXXX, -- be expect to EBITDA be down synergies. recognize we adjusted to modest the While we expansion

would test very I like details to XXXX driven measurement within and sales increasing sales embrace Emerson to Finally, sales. is our Thank for of System strong and for again an appreciated. year performance, this been now underlying and businesses entire be process of year and to much team The to you range hybrid integration excellent of we has We well, to the the work expect EPS guidance thank exceedingly XXXX our guidance. Slide your and performed measurement quarter. and Management XX turn team. Please test for are growth After our guidance. our adjusted underlying X.X% QX X.X% by the full QX full

in the in sales in guidance. the is test recovery mid-XXs sales flat consistent be discrete lower range. solely attributed in guidance in be the positive volume we the underlying the measurement. Full X-point to low excluding expected to comes year measurement, from now embedded continue expected down are modest November. and is in at the Operating test discrete FX to compared A with and versus automation year our leverage, to X% target to our and now single-digit expected as full expect headwind high to sales XXXX margin. to XXXX versus XXs automation low turn in in watch closely, now increase mid- to We move approximately FX a in is November a to reduction be QX

adjusted performance. from our Our range $X.XX EPS to $X.XX increases by driven QX

AspenTech is still expected to contribute approximately $X.XX to $X.XX.

billion. our Lastly, $X.X in flow billion million $XXX guidance completed was free we are cash expected maintaining of $X.X to repurchase is $XXX which QX. Share approximately be of to million,

expect have Tougher leverage to growth to comps are the the discrete with For sales in reported X.X% on we mid-XXs. impact in to second quarter, expected X.X% increase low an to quarter. the automation underlying for sales

the will to the to is -- operator expected are now for Q&A. with expected and we volumes $X.XX. And turn that, between EPS QX. be However, improve back call Adjusted to between $X.XX from to sequentially

Operator

of Andy [Operator The question Kaplowitz from first Citigroup. comes Instructions]

Andrew Kaplowitz

forward? backlog yet seems relatively orders? of mid-single-digit you strong And you inflection billion, thought. relatively Can as even it the plus process/hybrid in like up going $X.X talk seen been you significantly, your growth visibility about X%. sustain orders, have and It at with test order has going an then order NATI-related excluding that measurement forward? as Can think organic I you addition said, kind you was Lal, a

Surendralal Karsanbhai

to Andy, on color orders. you no, give happy the some

range mid-single-digit half about finishing fluctuate but we range, So lower now. in is the the as as of year the a in basis, on obviously, a biz, orders are the know you our first quarter-to-quarter which can single-digit year,

of on relatively about the strong business that and to Andy, we our based being MRO a a us the remainder we robust represented QX, approximately X base remain of factors, to high in It have And the degree as be first through provides strong. of revenue confidence activity. We that continues of XX% the that year. go order expect

to The the amount in sciences; in in East mining. funnel. that that And see despite won almost grew area, that. we million particularly little continue sustainability a funnel represented over and the course, Middle the a out conversion of in activity projects first approximately funnel life in booked of quarter. transition by Africa; tremendous and the $XXX Secondly, metals the and energy XX the We driven we of activity,

So from really an to the underlying focus Emerson and perspective, continue through that is to hybrid provide process strength year. the underlying

what half, recovery second we've that's baked Now discrete we in see will here. a got in and the is what in

We are been of do in demand-driven, and half, now expect the elements really couple into course, for the recovery about quarters. discrete second demand It's lower of some our we've orders still in negative single there. a last comps obviously right as markets. the talking in We digits between

plan also As in a much what to like activity. return second on is we concerned, far And believe signs semiconductor, NI come on orders. very report. early there's see of in particularly as and these terms it's we're expect starting order as the do to out We see markets, half you positive that companies

much and on which activity, very Andy. both confidence plan the order us ends strength in gives the on of So underlying

Andrew Kaplowitz

Helpful.

going or cash maybe raised working raise a you your your flow, talk side? and outlook. on better up? you that guidance costs? quarter didn't side and on acquisition-related You the free despite outlook. obviously had capital you Did good could the But on quarter change the Anything about Is just that CapEx

Michael Baughman

cap, guide, while a the the then billion. billion that did one. to Andy, about the the we was that's $X.X very cash And about November, integration-related. $XXX flow in Yes, the that's About earnings, $X.X with $XXX is plan. operating billion net a And expectations. We the sales, out And respect again, we the see $X.X the maintained just line million to mostly items, flow, $XX -- quarter we with took thought called much million took little within tracking $X.X we up it's a bit we on still little elevated take on up cash to bit of that the right billion. Mike. the lot guide go through plus million obviously. at in the in in math, I'll that of CapEx, to

than the all to better where But So here we sitting given we and can X going elected flow first did cash it guide plan. certainly quarter. months up you ago, about it's take to we today, I not tell set feel we

Operator

question Steve of from comes next JPMorgan. The Tusa

C. Stephen Tusa

from -- to the going loaded [ to you is Or of just you was it more clarity a sales? done of Can kind a in maybe quarter? $XX -- to kind did And you you've for the just from the the the look fourth talk from in XX like QX little account NATI in we the then, accounted by $X.XX for on ] this do out $X.XX expect sales X when about I all linear that of guess, guidance, just first million in the that bridge, doesn't what $X.XX? half, look heavily It a there decline. be

Michael Baughman

sales which the Steve, we performance the Mike. talk quarter. I'll dynamic, test in little lower we about the than a first that quarter. talked it's measurement Yes. this about period stub EPS were XX-day much a the and really didn't performance was little bit of them The own simply bit early the expected. part and We the

of ratable. from improvement more know, we They something nicely. business drove leverages, about what not expected expected. And ratable. as that were you the $X.XX really We And

those sales into performance. part So the of $X.XX that pushing drove quarter out

sales QX. that also Now that, QX we there was of in expecting were some

the we took we we thought and and beat forward, guide, $X.XX where rolled so $X.XX landed. when we And about that's that

off do about a and So great really the... we're and Ram, talk there. to on to test you great want performance start measurement,

Ram Krishnan

yes, QX. The second it's part the question, I not of think all in

XX. distributed evenly in X see step it will and you'll QX, So QX from up the

we the as sit to $X.XX about here. So feel pretty we $X.XX good

C. Stephen Tusa

one, just the discrete. on Right. And just last one

a that You on steady more little guys been discrete have performance.

that kind a who your had So in year, liquidation weakness. see strong you're to of started of some guys half relative to -- peers second you some of the of very last backlog

So start correct, quarter, the fourth the in the getting comps comps? easier year-over-year

Ram Krishnan

quarter quarter perspective, Yes, should from and third actually, a for good and in the us correct. fourth -- discrete from third quarters be

Michael Baughman

orders. And

Ram Krishnan

positive then turn And orders. sales in And will QX.

C. Stephen Tusa

Right. an comp. On easier

Ram Krishnan

Correct.

Operator

comes The from next Vertical Jeff of Research. Sprague question

Jeffrey Sprague

me. for Lal, X

funnels on the But give you one, just and U.S. in on has First on related the your Obviously, us that just and LNG. a done mind. your what your global how on might talked anything the and business, the East. it's perspective administration impact about approvals Middle business,

Surendralal Karsanbhai

Yes. a an to as be administration's No, with regarding But just from not -- honest. permitting global an overall to an Emerson -- decision export perspective, it LNG, disappointed certainly, hold we're business. from the permitting is American, very

of forecast and We which confidence will activity gives in funnel going the Qatar, us ample in have Mozambique have significant course, that movement. and activity in we in provide Guyana, in the

our And we've confidence, we us as but calls, see forward, impact In the of XXXX to have partners, meaningful -- we in given terms is exports. in for that America, transportation, any Then have that North executing time. we're Bechtel discussed are have don't on these won approvals projects the and required, we solid. relatively we'll go construction, just projects XXXX The that not we this that point for see. at the others Jeff, ultimately

Canada well. of to there's East Coast continue the and some strength activity up see East, We and in in Africa the accelerated Middle in as

see we'll that where goes related the U.S. decision. to So

Jeffrey Sprague

the be I -- us just of Lal, project non then does approval pending clear, illustrate funnel? totally And U.S. quarterly, the that they projects, for in some you to guess, are funnel that

Surendralal Karsanbhai

funnel. at Yes, on expectation year a about Depending lens looks X-year the that they're we of activity. funnel the of had, in

-- me, event. liquefaction X-year is liquefaction So funnel in to construction plant a of as excuse Jeff X- in they And are the you know, the there. a

will made down licenses being the on stretch, So export based awarded certain to continue decisions of Jeff. be assumptions

Jeffrey Sprague

if X-year. quick. laid I just synergies versus that real then you could X-year And shifting address initially on suspect your the NATI wonder Great. the But out were Certainly conservative. somewhat

surprised synergies, So up. they're kind the I'm not going cost of underlying

X really carefully you treading reason of of was thing. I about think and sort the that talked part years that

on cultural the guess, us the question. your give is of and that just I is maybe So thoughts the of where integration, side the heart

Surendralal Karsanbhai

with I this, Jeff. will start Well,

a to around have phenomenal to signing have a execution, we closely go, been that degree we and The do speed Emerson not has to team to it's the amount with We here then of we've team works integration a degrees, the significant with of degree years. Ram, confidence, done spent by that fast the at that? a close Fabre execution caution great in Reto which the to and between business. management at very time what team so of hit that effort, many believe pleased the we very and we wanted team course, how it the running. But the is could company the we time a imagine, number better. and to this And ground transaction. the -- run you energy increase gave accomplish. X the work of decrease time could can can but us And could to as execution We it any grow the increase color of can bought large this on of been had just because which

Ram Krishnan

you Yes, said it.

to as team, similarity the surprised, very the both very, quality synergy and the moving do this And the plans, and the we pleasantly in that's the. cultural faster It the good done actions. felt of customer-centricity been reviewed the we've think, along. where rules between both business how think I we we apply how very the

could we we that's think that get we it raised feel reason faster. there can very the the X. confident it, we And we of move by done also end year I believe -- and

Operator

The Nigel next comes Research. Wolfe question of from Coe

Nigel Coe

I NATI So Instruments, far, obviously, on a lot National of so questions guess.

synergies. time for accelerated obviously line You've the the

targets. But you XX% margin you $XX Jeff As the raised mentioned, million. it by kept

if consider Just offsetting kind synergies anything there's of we should upside cost to wondering the there.

Michael Baughman

Nigel, talking that's And No, that it's years out remember, on XX%. were about, X we there's really Mike. plan.

We track. are on

the of the near actions. around our adjusted important up our the measurement. test there's And think sales, the it's moving term synergy a change bit to that be reflecting on no down year-over-year expectation expectation and that no, longer-term thing I for EBITDA really will around margin little forward, that profitability is

Nigel Coe

gives No, $XX of million point an extra no. But margin. the you

like doesn't if wondering is, just that. the but spirit the of It offset So sound there there's just to question. that's anything

Michael Baughman

There at I the... mean isn't.

Nigel Coe

Yes, go ahead.

Ram Krishnan

we offset good we're isn't No, are margin investment identified necessarily the find no additional the because anything by XX% XX% investment number. with applies year target million. but million the opportunities. If good and the on mean And focused there executing through is comes out. what opportunities, I we opportunities, comfortable that isn't. synergies set, mean, we'll the goes now, targets X if we've pretty make your to we've obviously, the But feel $XX out is there. we getting $XXX think right maybe There I number finding X. investment up, years I that

Nigel Coe

within XX% And looks easy an just Okay. analytics. comp. some extraordinarily like had I'm it's No, the mean that's within strong It then question. fair. numbers I worth growth I ID. know being this counting, just you but measurement

part sort talk discrete. therefore, like So hybrid out right precursor little a what automation seen there that that in theory importantly, just markets -- might see X and months maybe about there's we've of down of you is now spot discrete a the bit. are a on lag But the And for just process more a road. the

can So out like just certainly, And unusual sound just maybe that you address it, that It that but you're maybe seeing? concerning just point? or there. anything doesn't address concern

Surendralal Karsanbhai

drivers continues be by been being very we consistent think a historically. been it's secular transformation. Nigel. And commentary. X this digital I whether of discussing, will that quarter security, quarters or the macros seen what nature hybrid affordability, again, sustainability last secular in The energy we've type Yes, different that with to we've and And and to been drivers the in robust I've happy asked are experienced through than so. initial the are for around macro go enough cycle they to, nearshoring, our supported about speaking those secular process and

Secondly, cycle moderated experience over experienced. This is boom in last much the process and a space in a cycle. capital that we bust did more the not we

overcapacity benefit customers. by and have the that experienced. layouts in have And much more the was don't There that's the So a situations well. capital discipline overbuild we our we situations typically as

continues our So robust, be obviously. very business to

the in We continue runs in and year. to the the execution order through have confidence

Ram Krishnan

Yes.

Just to that a answer business. back the function that XX%. the up That's chains question, first part Automation in your of Solutions coming supply of

front, it significant easier was had challenges an QX electronics alleviated. you of If have on we comparison. year, last remember, the which

So our XX% up up sales chain. high improving are supply digits, driven orders single by

say, -- with a weaker So it's clearly driven data comparisons, would I of year. easier by point QX last

Operator

Research. Scott Melius Davis question of The from next comes

Scott Davis

good Congrats start. on a

Surendralal Karsanbhai

you. Thank

Scott Davis

just I wanted bit it back like that refocusing? at mean? you're about do to and to transformation type thing Is you little measurement. Or What an XX-XX when going talk up you a R&D test think a lot -- generally you But it unfocused, NATI those they're do how good at always I of think? -- do Or was about money. guys folks you know the spend it?

Ram Krishnan

Yes.

the prioritization it's on think purely I projects. of

for versus around more innovation. But can R&D EVs, do resources is that I lots allow cost to we're Austin, balance strong drive how of the gone look perspective. in And do as to better that cost at in us opportunities what finding we're software the of where where culture at mean supportive of of be prioritize, those important are at into an of order innovation segments across think from on very think prudent capabilities, example. critical particularly the X some are The of ADAS that a sales. we system needle, need I think few growth and a do NATI bringing percent can these semiconductors these will move from I I our like opportunity. a macros plenty to how discipline in there's with a focus we've moves we beauty how markets needle we innovation, we market on do management priorities move

Surendralal Karsanbhai

And to add, I will just Scott, that.

a is programs that having to like think ones always and always businesses, legitimacy our that. But where cars believes company innovation. research important. of in means, market move And important. its I customer of by be to space NI space we that commercial management element in heavily the in going we have will forward. needle a to it success parking really investing we in that's believe will, that has position the result continue And some and with in responsibility all and the the we do as continue ultimately is technology all will the role That's the in have a viable

So of really here thoughtful good by Ritu. being team done and work Ram, led the by work and course,

Scott Davis

across of for suite of Is If win is win you with types context. valves? full SAF Is DG stuff specific scope as is Or a class Are Helpful you full a projects there kind little like classify we target that something offering? when up it there the controls? back -- bit Fuels. is you those you talking the again, what like more a win? Can cited there -- meters, you of would that? a

Surendralal Karsanbhai

level pressure use control if control was think elements No, the across you the a muscle DeltaV that flow, in final was the alongside analytics sensing plant, -- then both -- Yes. this about this and the temperature, our packages automation much pretty elements, the the it. and system stack, we stack, the the entire

really out holistic at Emerson site. So this proved comes portfolio the which value of was win, and how the all package, together customer full a it a XXX%

Operator

The next of from Julian Mitchell comes Barclays. question

Julian Mitchell

in whether shareholders the oil a the customers, an the their West. circle part by understandably gas around to Just particularly Middle it to on large is there's back wanted that energy sort in Because in of of world. effort government process the as investments more sort the if they're public seem East does sort cash to and shovel clear shareholders, or of discussion of and

backlog just on or that QX. grow next to Should does we so? of orders? with the sort moderate with expect pull over sustainability your thoughts, in the book-to-bill down XX that that the then process high single-digit the orders kind And you so growth So wondered of months still can that high in saw of that the backlog Or was it? moderating Lal,

Surendralal Karsanbhai

orders of company sustainability there's of activity in and East, sustained the can is question, that confidence Dhabi, kind just customers those will robust, on think And Abu mid-single-digit total rate environment where spent Arabia, the process team that And very give Middle so tell predominantly end our year. exit our energy enough It's Yes. I significant Qatar. elements. Saudi transition, great a and Middle in team I with -- at us the Julian. the you on X India I East from time returned spent demand-driven the around the the

analyzing this spaces the at X the So in about. process, in about point, that haven't we thinking seen now and for been so. But this we've asking quarters or particularly deceleration kind any you're of

intentional waned as to don't reliability, And course, disciplined fact, that very productivity, production differentiate -- safety. go we foresee spending, hasn't around automation elements and matter a that yet. around very efficiency, the we don't of year. I through core And of of As that can see we continue

Julian Mitchell

more question. That's of And fiddly a sort then much just near-term helpful.

so a guide looking XX, from and the at is increase sequentially. midpoint sequentially sequentially. at of on move if despite business as Slide going that's else terms maybe of decent test falling the sort $X.XX in EPS and from base up Partly, volume anything Just the like second changing quarter there QX something to the was But like measurement wondered QX earnings in you or that QX. just the revenue mix

Michael Baughman

hit the and no low mix or it to comment. leverage in coming you No, trajectory. the test in change through And with mid-XXs reflects big right the measurement

the nothing really there guide. no, So on QX

Operator

comes question next Snyder UBS. from of The Chris

Christopher Snyder

$X.X ask Instruments. All you X.X year on about billion. full $XX $X.X guide. call QX to million the I also was the billion. wanted now to above are in talking last National of on billion the to a But came commentary guys

you bit Is So thought it Or I a rounding just is Instruments beat? was maybe slower a than that turning the previously? guess, range National little following error?

Colleen Mettler

back that has you to guide, consistent. Yes. range Chris, remained if November go

about. being round $X.X I was a think spoken it just that billion was in

Christopher Snyder

of And on over just couple then a the It's bright for want been years. ask the spot last I real margins. company to

You guys mix on QX to the there aware on or was of? there something beat. from beat full incrementals mid-XXs anything I the the incremental despite I low guide to guide again from think, lower, to be -- high the mid- Is believe QX. here in year But that we should

Michael Baughman

drive with remain price/cost, reductions But to and with and then continue was yes. into Chris, offset in so in comes the point a The to drivers the to volume attached We with Emerson number the solely to assumption X to a talked about FX lower on leverage which leverage of much inflation, and it. attributed the change there, same exchange. cost that profitability the -- changed element. effect around guide the had the management answer FX, it leverage increase specifically, and Yes. we process the really comments, we foreign your question

Operator

comes of Markets. from Deane Capital The next Dray RBC question

Deane Dray

for It been a Look, progress in new cost it the Are bit there's there where to? timing up expectations from? cross-selling? too been it Is be making but just expectation? on we might might lot of front on the and National and a focus just early, about Can opened revenue what's synergies? you're But Instruments. the synergies customers size talk come you've

Surendralal Karsanbhai

and as maybe I'll that we're ideas, let not sales said have been a But color. NI. Obviously, a have that, with synergies. or come to with that, a on that on. the Ram? to working Emerson Ram certainly even cost. Ram number believe and we're but focus on commitment little -- that the months Reto -- publicly that X we're of some we thinking do across sales jointly is certainly, it And out meetings keenly working going customer is evident held opportunities we on of add and had I'm something away ideas was we it's I management bit opportunity. Having the suggest customer-specific in are portfolio comes alongside and an X through on

Ram Krishnan

validation customer production to overlap then on the to X focus, and where a be enough these in that ready through process. And to and and I semiconductors, side working We're where sales on the and end systems plays validation, think holistic where and the -- on and working Yes. are will it. value NI provides but our test capability meaningful see through the customers R&D we R&D opportunities. in a we're synergies, the similarly production where X automation commit markets there's certainly basis through yet not from are joint we just batteries clearly quantify EV is markets going play We're the on the

Deane Dray

are the bit Great. areas estate are I apologize late, so that that macro just It pressure. the What And then in you're this, there. the the just the most of near term? the expectations? doesn't you've covered China. joined positioned lot -- anxiety like look I are about on second having A question, opportunities like if But a what real over

Surendralal Karsanbhai

single grew China Yes. high the quarter digits sales. We in in

single We digits -- the expect high in high mid- year. to that for

Deane, be But the in It's different to chemicals to very again, aligned, continues position other end business seeing and China. that are secular globally. macro drivers Our same robust, slightly is no strong. Perhaps markets relatively specialty those a things. our different, we're few

to in through very China strong. we Our anything? go regionalization the strategy been year. has expect win to And we Ram, continue as

Ram Krishnan

it. Yes. said No, you

measurement. expecting Test a and second drive growth. process but test and business. not what start half numbers with is with a what's I and will underlying recovery, tougher business, in the think discrete to our consistent seeing in discrete. obviously, core measurement I the Off consistent China, chemical we're in power mean, with hybrid is the

Operator

comes The Wells Joe question from next Fargo. from O'Dea

Joseph O'Dea

the would think off in months obviously sure, change the of real the the I have anything, of X It you're much of months guide, suggest organic X year, ticked kind I expectations? the the of If any rate. ago? terms the how the about touch. strong and like a side that start. want months implied the no the remaining message a could to is change seems But growth down change X the But what's organic margins that just organically, math in in of thinking not last year in in Just to make versus

Surendralal Karsanbhai

of strong environment. with by organic our the No. really. very we We terms change remain execution no that the outlook, on Obviously, couple positive But in teams. the

Joseph O'Dea

And Okay. understand some strength I sequentially. measurement then and comps, commentary on related stacks analytical, did easier the but in improve the to

to this you ship supply chain, backlog there's where having And you do is normalization number. now still mean it Or where to as out? so I a to you are point? pent-up pretty a more orders some digits as single high pretty view relates encouraging it Are at the on up point close gotten at normalization? a

Ram Krishnan

Yes, the normalized. supply chains have

that's ability So and procure out normalized. production our of of and we to factories in factories, electronics drive terms feel load

measurement certainly, XX% there comparisons easier is drove in backlog in some our the through to what and ability analytical backlog QX. business, the The ship is will and that that Now ship QX. overdue

orders You'll in the analytical But see still up remains that demand measurement business the and very supply that last healthy the perspective. digits. environment in business. with a normalizing That's for chain the from single business high

Operator

Linzey the Brett Mizuho. of And next comes question from

Brett Linzey

Wanted about the able some color platforms. growth back share were project is the I be those anything give those deals the of there? and there was way service the to profitability structured to attachment or Emerson's And aftermarket on might to different unique you and funnel. hoping come or rates wallet the

Surendralal Karsanbhai

Look, certainly but the between No, project that's well profitability different. really and activity, nothing MRO known. varies

work platform really I project think a difference and a the mix significant you of funnel, terms know in that well. But growth not the there's within there. traditional between

portion through have we for managed we maintenance global and commitments with it, obtained with a course, where around contracts, through that have that, a our others billion $XXX of of Of customers. world. of are upgrades, And installed replacement that base and and large many activities is service And of sort. some the things

Brett Linzey

price/cost, to guide shifting was And points. the just I Okay. about then Great. X think original

Has on year? that expectation at any all side? And X inflation the or cost material then changed for quarter. the the is points all movement expectations had in nonmaterial You on the at shifting

Ram Krishnan

is X points quarter, good, X points feel change there. price No, no year. the the We in for

We think on Sea or with any side. Canal. dynamics impact -- the inflation of material In direct see have the opportunities it's costs around come net Red we're Panama on our in I don't terms from we're what's inflation, the of continued material logistics that the or minimis driving going down. seeing The de in terms

inflation we as improve year. see to we continuing material net or through the NMI go So

Operator

This concluded. concludes our you now today's and conference session, question-and-answer has Thank presentation. the for attending

You disconnect may now

Emerson Electric (EMR) 7 Feb 242024 Q1 Earnings call transcript